GONZALEZ V. BANCO CENTRAL CORP. 27 F.3d 751 (1st Cir. 1994) CASE BRIEF

GONZALEZ V. BANCO CENTRAL CORP.

27 F.3d 751 (1st Cir. 1994)

NATURE OF THE CASE: The court dismissed Gonzalez's (P) suit against Banco (D), land developers and banks, on the ground that res judicata barred the action, which alleged, among other things, state law claims and violations of the Interstate Land Sales Full Disclosure Act, 15 U.S.C.S. 1703, and the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C.S. 1961-1964. P appealed.

FACTS: Real estate developers sold subdivided lots of undeveloped land to 3,000 purchasers, most of whom resided in Puerto Rico. The real estate proved to be Florida swampland, unsuitable for development. In 1982, the Rodriguez plaintiffs commenced a civil action. They sued the sellers, the banks that financed the project, and related individuals. The Rodriguez plaintiffs alleged violations of the Interstate Land Sales Full Disclosure Act, the Securities Exchange Act of 1934, and the Racketeering Influenced and Corrupt Organizations Act. Some of the plaintiffs formed the Sunrise Litigation Group. The group's members paid fees that helped defray the costs of the litigation and exchanged information that sometimes proved to be of use in pursuing the litigation. After years of discovery and numerous amendments to the pleadings, they Rodriguez plaintiffs sought to convert their suit to a class action. In April of 1987, the district court refused either to certify a class or to permit additional plaintiffs to intervene. Several prospective plaintiffs who had tried in vain to join the Rodriguez litigation initiated the instant action. Ps were represented by the same lawyers who represented the Rodriguez plaintiffs. They sued the same Ds and their complaint mimicked a proposed amended complaint on file (but never allowed) in the Rodriguez litigation. Despite strong evidence the Rodriguez plaintiffs frittered away much of their case through a series of pretrial blunders. They lost what remained of their case after a seven-week jury trial when Judge Fuste directed verdicts for Ds on the only surviving claims. The ruling was upheld on appeal. The judge dismissed Ps' action in its entirety on grounds of res judicata. Ps appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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